"They Are Using Ethanol In Racing Cars": Oil Minister Hardeep Puri

July 03, 2026

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by Himanshu Shekhar Mishra (India News/NDTV) Puri defended the government's push towards greater biofuel blending while addressing the heavy financial toll on oil marketing companies amid recent global crude price volatility triggered by the Middle East crisis.

Petroleum Minister Hardeep Singh Puri today said that ethanol is being used in racing cars and that the biofuel helps them accelerate. Puri defended the government's push towards greater biofuel blending while addressing the heavy financial toll on oil marketing companies amid recent global crude price volatility triggered by the Middle East crisis.

"Somebody is saying that fuel mileage is going to drop. It is now well established that ethanol is even used in racing cars. Acceleration improves. What is that called? Knocking? Knocking also improves. Mileage? Yes, it may drop a little. But it may drop slightly due to various factors," Puri said.

"Secondly, after consulting all stakeholders, including SIAM and ARAI, we have reached this stage. Then someone says, 'Your insurance will no longer cover this'. Insurance companies have already clarified that there is no such issue. But who benefits from spreading this false narrative? I am not going to make any accusations, but one thing should be very clear. There is enough space in India's growing consumer market for all technologies to coexist. There is room for electric vehicles, biofuel-blended vehicles, and we are currently only at 20 per cent ethanol blending. If we move from 20 per cent to 25 per cent, it will happen only after all the necessary tests have been completed. There is also enough space for hybrid vehicles and CNG vehicles," he added.

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"There is enough space for E-Vehicles, Bio-Fuel Mixed Vehicles etc," he said. India would look to move beyond the current E-20 fuel blend only "after enough number of tests have been conducted," he added.

The minister's comments came as state-owned oil marketing companies grapple with substantial losses. Oil companies suffered Rs 74,781 crore losses for selling petrol, diesel and LPG below cost for the period up to June 30, when global crude oil prices spiked in the wake of the Middle East conflict, Puri said.

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According to the Ministry of Petroleum and Natural Gas, the United States uses E10, with E15 expanding and millions of flex-fuel vehicles running on up to E85. Brazil leads with E27 mandates and plans for higher blends, while many new vehicles there are flex-fuel capable of handling up to 100 per cent ethanol.

Canada, Thailand, Japan, and several European nations have also embraced it. India's E20 programme sits comfortably within this international mainstream. Ethanol's high octane rating -- around 108 RON -- makes it particularly prized in high-performance engines, delivering superior anti-knock properties, power, and a cooling effect that enhances efficiency in turbocharged and high-compression motors.

India's Ethanol Blended Petrol (EBP) programme traces its roots to the early 2000s, with initial 5 per cent blending pilots, the Petroleum ministry states.

Production capacity has surged from about 38 crore litres in 2013-14 to 2,000 crore litres per annum. Blending levels rose from a meagre 1.5 per cent to 20 per cent, achieved in December 2025. Since 2014-15, the programme has delivered foreign exchange savings exceeding Rs. 1.90 lakh crore, payments to farmers surpassing Rs. 1.60 lakh crore, crude oil substitution of over 310 lakh metric tonnes, and CO₂ emissions reduction of approximately 930 lakh metric tonnes. READ MORE

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Excerpt from News X: The Centre has made it clear that using government-approved ethanol-blended petrol will not be a reason to invalidate a motor insurance policy. Insurance companies have also reiterated that the type of fuel used is not a factor in determining whether a claim is payable.

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Addressing a press conference, he said, Insurance companies have already clarified that there is no such issue.” He said misinformation was being spread, although all concerned stakeholders had been consulted.

The clarification comes at a crucial juncture as India has already achieved 20 per cent ethanol blending in petrol (E20) and is looking at the possibility of increasing the blend further after completing all the necessary technical assessments.

Will E20 petrol have an impact on your insurance policy?

The short answer is no.

Motor insurance policies are intended to cover insured events like accidents, theft, fire, natural calamities and other risks mentioned in the policy document. They do not apply to the normal use of approved fuel purchased at authorised fuel stations.

Simply topping up your car with E20 fuel won’t automatically invalidate your insurance policy or reduce your chances of getting a claim.

What the insurer has to say

The rumours gained more traction after earlier reports circulating online claimed that ICICI Lombard General Insurance would deny claims if a vehicle was damaged by E20 petrol.

Later, the insurer issued an official clarification that motor insurance cover remains fully valid when the vehicle runs on E20 fuel.

“Claims are admissible based on the occurrence of insured perils such as accidents or theft. The type of fuel used in the vehicle is not a determining factor in claim admissibility,” ICICI Lombard said.

It also stated that using E20 petrol in older vehicles is acceptable and will not lead to the rejection of a valid insurance claim.

Will E20 petrol affect mileage and engine performance?

Beyond insurance, there have been many questions from motorists about the impact of E20 petrol on vehicle performance.

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The government estimates the loss of fuel efficiency at between 1% and 6%, depending on vehicle and driving conditions.

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Was the decision made after consulting the industry?

The ethanol blending programme was started only after detailed deliberations with the stakeholders of the industry, the petroleum minister said.

Before announcing the E20 roadmap, the government had consulted organisations such as the Society of Indian Automobile Manufacturers (SIAM) and the Automotive Research Association of India (ARAI), he said.

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What owners of older cars need to know

Insurers have made it clear that E20 fuel does not impact the eligibility of a claim; however, owners of older vehicles should still follow the recommendations of their vehicle manufacturer.

Older vehicles not specifically designed to run on E20 petrol may see a slight drop in fuel efficiency over time. Longer use can also cause faster wear on some rubber parts such as hoses and seals, as well as minor changes to the overall performance of the vehicle.

Experts recommend that owners of older vehicles follow manufacturer guidelines and have their fuel system checked during routine service.

Regular servicing and periodic inspection of fuel system components can help to minimise these problems.

FAQs (Frequently Asked Questions)

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Excerpt from India Today: Union Oil Minister Hardeep Singh Puri recently defended the government's push towards ethanol blending, arguing that the biofuel is not only cleaner but is also capable of delivering impressive performance.

Addressing concerns over fuel efficiency while speaking about the government's ethanol programme, Puri pointed to one of motorsport's biggest examples.

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Ethanol contains significantly less energy than petrol. E85, for instance, has around 21% lower energy content per litre than E20, which ordinarily translates into lower fuel economy. So how can a fuel with less energy deliver better acceleration?

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The science behind ethanol's performance advantage

Speaking exclusively to Auto Today, Vikram Gulati said the answer lies not in ethanol's energy density but in the way an engine is engineered to use it.

"Formula One cars, which represent the best of performance, use ethanol, so you get much better torque and much better acceleration using ethanol than with petrol," Gulati said.

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The engineering Gulati refers to revolves around ethanol's much higher octane rating. E85 typically has an octane rating of around 105-108 RON, compared to roughly 95 RON for E20. This allows engineers to run higher compression ratios, more aggressive ignition timing and, in turbocharged engines, higher boost pressure without causing engine knock, enabling greater power and torque.

Ethanol also absorbs significantly more heat as it evaporates, cooling the intake charge. The cooler, denser air entering the engine contains more oxygen, improving combustion efficiency while further reducing the risk of knocking. These characteristics make ethanol particularly attractive for high-performance engines.

Why most road cars won't feel faster on E85

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Dedicated E85 racing cars, Formula One power units and performance cars engineered specifically for ethanol are calibrated to exploit the fuel's unique properties. By contrast, production flex-fuel vehicles are designed to run on a wide range of ethanol blends from petrol and E20 to E85 and therefore use a compromise engine calibration.

"A flex-fuel vehicle is really peace of mind because it is future-proof. It can take any mix of ethanol. Even if tomorrow the blending percentage changes, the consumer doesn't have to worry because the vehicle is tuned to accept any ethanol mix," Gulati told Auto Today.

As a result, while flex-fuel vehicles offer greater flexibility and compatibility with future fuels, they may not fully unlock E85's performance potential. In some cases, drivers may notice similar or even slightly lower performance because of ethanol's lower energy density.

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The Koenigsegg CCXR proved ethanol could be a performance fuel

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One of the best real-world examples came nearly two decades ago. In 2007, Koenigsegg introduced the Koenigsegg CCXR, a hypercar engineered specifically to exploit E85 rather than merely tolerate it.

Instead of using ethanol to reduce emissions or lower running costs, Koenigsegg used the fuel's exceptionally high octane rating to extract extraordinary performance from its 4.7-litre twin-supercharged V8. Running on E85, the engine produced 1,018bhp and 1,060Nm of torque, enabling a claimed top speed of 402kmph and a 0-100kmph sprint in just 3.1 seconds.

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Gulati believes, however, that the economic impact on consumers can be addressed through fuel pricing.

"World over, governments have ensured that the consumer does not have any adverse economic or financial impact by maintaining an adequate difference in the pricing of petrol versus ethanol. The consumer should not feel the pinch of losing fuel efficiency because the total cost of operation should still be better than that of petrol," he said. READ MORE